Corporate Sustainability: The stakes just got a whole lot higher

Corporate sustainability didn’t become passé with this election: it became essential. We now know that government isn’t going to ride in and save us on climate change. Government isn’t going to focus on air quality or water quality or social and economic consequences of infrastructure projects. Government isn’t going to set the standards or raise the bar.

For those of us in business, that means it’s on us. We have to set our own standards and drive our own accountability. And those outside business are going to turn to us as the change agents they can still hope to influence. They will raise their expectations and their pressure on us, whether as our investors or customers or communities or employees.

Like most of us, I didn’t see this election result coming. I was nervous but not prescient. A week before the US election, I spoke at an industry sustainability symposium. I posed two challenges to the group. With these election results, the stakes on those two challenges just got a whole lot higher. What are those two challenges?

1. Focus on what really matters for your sector and company

This is a lot harder than it seems. There are scores of sustainability issues. The babble keeps getting louder. There are some important signals, but the noise-to-signal ratio is bad and getting worse.

The highly-visible players in the reporting/ratings/rankings world make it harder, not easier, to focus. SASB, DJSI, SAM, GRI, CDP, FTSE4Good, ISO, SDGs: the alphabet soup is pretty thick. Each wants to be the standard for standards, each wants your attention, each wants your time. Each comes from groups with their own strategies for visibility, credibility and influence. There’s nothing wrong with them having their own strategies – but their strategies shouldn’t drive yours.

Are all these standards relevant? Probably. Are they indicative of issues you should be aware of? Yes. Are they required? No, but ignoring some of these can hurt you by getting your company on the wrong list; think of these as table stakes that may be necessary to play in the sustainability space, but not a bet that can pay off for you. Are they efficient? Absolutely not. Are they effective? Depends on who you are and what you’re trying to accomplish. Are they (as lawyers would say) dispositive, settling the debate over where you should focus? Absolutely not.

Instead of focusing on the standards, concentrate on the issues that are truly critical to the health and success of your business. For example, if your company is in the food/agriculture sector, you can’t ignore obesity and water. In the industry I addressed last week (railroads) there are some obvious issues like air quality and carbon/energy. But there are other critical issues like “post peak coal,” life in a carbon-constrained world, resiliency (including the growing impacts of and narrowing window to prepare for sea level rise) and impacts on sustainable cities and communities. A good materiality process has to highlight those kinds of issues.

Once you’ve figured out what matters to your business:

Does your business acknowledge it?

Does your business have a plan to deal with it?

Are you really implementing your plan?

If so is it working?

Above all, as you go through this process, are you looking through the windshield or in the rear view mirror? Some of us are painfully aware of generational changes in our employees and what they value. How many of us, in materiality, are looking at generational changes in our customers – let alone in our investors?

2. Decide what your personal role should be

Once you’ve figured out the issues that matter, there’s a second question: What is your role in helping your company understand and act on those issues? Is your role to enable? Apologize? Defer? Deflect? Explain? Inform? Improve? Influence? Challenge? Lead from below?

To look at the tough question of your role, you need to ask yourself honestly–

Not just who you talk to, but who listens to you?

What would be different if your job didn’t exist?

Do you help your company understand and face issues or avoid them?

Do you help your company learn and get better, or get by longer without having to change?

Do you get buy-in from senior management, or do you settle for acquiescence? Do you sell them on facing the tough issues, or only sell them what you know they’re already pre-disposed to accept?

How much do you manage performance, and how much perception? (Both are valid – but what’s the right mix of the two?)

Above all, what’s your legacy going to be from your time in your role? It’s not just CEOs who get to – or have to – ask that question. One advantage of age is that I’ve been around long enough to see the consequences of my roles and actions. What may seem like the distant future to you now will be your present and then your legacy all too soon. You can’t shape your legacy retroactively; you need to make those decisions now.

So what do you do?

I’m not proposing that corporate sustainability professionals commit career suicide. I am proposing that they:

Use materiality for real – to figure out “what matters”

Use materiality to drive action, not just communication

Use materiality to identify and engage key stakeholders

Make connections to the revenue stream, not just cost

Make connections to real business risk

Identify and recruit champions, often not your boss or even in your chain of command

Decide what you want your role to be. I can’t tell you what that role should be, but I can tell you it should be determined by design and not by default.

All this was hard before the election results. In the political climate after the election, it’s that much harder – and more essential. In the US, government is not going to solve key sustainability issues. It may not even acknowledge them. If you work in business, if you work in sustainability, and if you think the issues you’re working on (like climate change) really matter, then you don’t have much choice. The time to focus on what matters and on your role is now.

[Opinions in this blog are solely those of Scott Nadler and do not necessarily represent views of Nadler Strategy’s clients or partners, or those cited in the post. To share this blog, see additional posts on Scott’s blog or subscribe please go to nadlerstrategy.com.]